Earlier this morning, University President Christopher Eisgruber ’83 announced an enormous increase in student financial aid. Increasing student aid is one of the better uses of the University’s recent financial gains, second only to expanding the student body (which Princeton is also doing). But increasing aid is not enough — Princeton needs to take steps to drastically reduce its sticker price, if not eliminate tuition altogether. Tuition is completely unnecessary to university finances and by keeping its sticker price high, Princeton contributes to tuition inflation across the country where aid is not so plentiful.
Students may already be aware that the University doesn’t rely primarily on tuition to fund its operations, but the numbers are staggering. In 2021, net tuition and fees — that is, student payments minus student aid — came out to a grand total of just under five percent of the University’s operating revenue. The total amount raised by tuition and fees, just more than $100 million, is less than the more than $300 million surplus that Princeton ran in 2021. That means Princeton could have cut all student fees campus-wide while still having a budget surplus of about $200 million. We pay tuition out of a sense of tradition more than anything else.
Now, the most obvious argument against eliminating tuition is that eliminating tuition would be a massive giveaway to the richest families on campus. If Princeton is able to be perfectly price discriminatory and fleece the rich for every last cent they could pay, why shouldn’t it? In The Harvard Crimson, Editorial Editor Joel Sabando argued that Harvard’s tuition should be much higher: up to $1 million so that the ultra-wealthy pay the same proportion of their income as any other Harvard student.
But viewing tuition at ultra-elite colleges as a method of economic justice is missing the forest for the trees. Even if every dollar in tuition was put to great use at Princeton or Harvard, which it obviously isn’t, that money is benefitting Princeton and Harvard students who already have extraordinary advantages just from attending. If you think the wealthy need to contribute more to society, that money should be paid in taxes which benefit the average American, not tuition to elite colleges.
One might think that every extra dollar counts, and if families can pay, they should. But that ignores the fact that Princeton is contributing to an inflated college price market. Princeton is one of the best-known colleges in the world and its decisions have impacts. If Princeton substantially dropped maximum tuition, say even to just $10,000 annually including room and board, our peer institutions would face enormous pressure to do the same, especially from the upper-middle-class students who have the most sway over the University. If our peers kept increasing tuition, they would be hit on the very metrics that they care most about: number of applicants, U.S. News and World Report rankings, and yield rate.
Other private colleges might have to start dropping tuition to match, and as tuition at private colleges starts to drop with lots of press and fanfare, public colleges could start feeling the pressure not to charge well above the private options. The only tangible way to reduce tuition prices is to apply downward market pressure. Currently, elite colleges charging exorbitant fees (even if they’re mostly returned in aid) allow other colleges to raise prices as well. Princeton and Harvard can’t solve this problem on their own, but in a market economy, price signals from the biggest brands are bound to make a difference.
Let’s be clear about what lowering tuition means for colleges across the country — it means cutting costs. Princeton may not rely on tuition to stay afloat, but other colleges do. The University of Virginia (UVA) credited 35.6 percent of its non-medical revenue to student tuition and fees in 2021 and only spends 6.3 percent of its academic budget on student aid. If UVA had to slash tuition, that would mean substantially cutting yearly costs. Some statistics suggest that colleges should cut down on administrative costs. While bureaucratic bloat is no doubt a real problem, pretending that waste, fraud, and abuse will be perfectly targeted by cost-cutting measures is naive. The argument about bureaucratic bloat is also often tied to conservative critiques of “diversity deans.” Even if we did want to cut these positions, we aren’t going to meaningfully reduce costs on the back of DEI programs. If we cut costs, the student experience will be affected.
It seems arrogant to sit at Princeton, with its massive endowment, and plot to worsen the student experience at other universities. But the truth is that students are not paying for an “experience,” they’re paying for a degree. College costs have gone up because the degree is valuable enough that people are willing to pay for it and able to pay for it because of federally guaranteed student loans. But the “high tuition high aid” model pioneered at Harvard and Princeton has contributed to a world where colleges compete more on amenities than price, where colleges gouge prices and taxpayers to guarantee the money, and where generations of students are hampered by mountains of debt. Because of the market economy, other colleges have adopted the high tuition, but not the high aid.
We have at least some responsibility to try and set it right.
Community Opinion Editor Rohit Narayanan, a junior from McLean, Va., promises that his writing is worth exactly what you pay for it. For a base price of $40,000, you can email him at email@example.com (he will even read the email at a 10 percent surcharge). His tweets @Rohit_Narayanan are not cheap, but he offers a very generous loan package.